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It's That Time Again: Year-End Planning

As 2014 dwindles down, it’s time to consider your year-end planning.

The holidays will be here before you know it, and that means the end of 2014 is near. Have you started your year-end planning yet?

A recent article in the Physician's Money Digest, titled 10 Financial Planning Tips for Year-end," offers some helpful financial planning tips for the year-end.

Here are just a few of the items in the article that you should consider as the year comes to an end. If you have any questions, talk to an experienced estate planning attorney.

• Think about adding to or opening a tax-advantaged 529 education plan for future education expenses, which allows you to make five years’ worth of gifts in one year.
• Make your last-minute charitable donations, and maximize your itemized deductions by donating property, or appreciated stock (i.e., contributions are deductible if you itemize deductions).
• For 2014, you can make gifts up to $14,000 (per person) to as many people as you want without any federal gift tax.

• If you're over 70½, be sure you’ve taken your required minimum distribution, including all of your IRAs in the calculation.
• Review the beneficiary designations on your IRA’s, 401(k)s, and insurance policies to confirm the correct info, and don't name your estate as a beneficiary!

There are more tips in the article.  After you read the original article, review your own year-end options and ask your Sacramento estate planning attorney at Redkey Gordon P.C. to review your specific situation, too.

Reference: Physician's Money Digest (October 17, 2014) 10 Financial Planning Tips for Year-end"

L.A. Says "No!" to Elder Abuse

The new programs will be working with those in the private sector and nonprofits to help law enforcement attune to impalpable signals that could indicate mistreatment of this vulnerable population.

Los Angeles is taking a stand against elder abuse with new training programs for the private sector and nonprofits.

“Our office is in the forefront of domestic violence,” the City Attorney commented to the Los Angeles Daily News, as reported in an article titled "L.A. gets $1.6 million to combat elder abuse."

 “Our office receives 11,000 cases of domestic violence each year, but last year, we received only 100 cases of elder abuse," the City Attorney noted.

He's certain there are more cases out there and that elder abuse is under-reported. Victims rely on caretakers, and because of that, are hesitant to come forward and make a report.

L.A. Mayor Garcetti said domestic abuse cases are increasing, even though other types of crime in Los Angeles are at historic lows. New programs will involve training for the private sector and nonprofits to assist law enforcement and to recognize symptoms that are sometimes hard to detect but that could indicate mistreatment of the city's seniors.

The mayor reminded readers that Los Angeles has "absolutely zero tolerance for domestic abuse, for sexual abuse, for elder abuse,” and that there is help for victims.

Los Angeles Assistant Police Chief Michel Moore was quoted in the original article as saying that a major issue with domestic violence is that it continues for generations and often brings about other criminal problems. Moore encouraged people to pay attention to the elderly, saying “If you see repeated signs of bruising or other problems, report it.” He added that friends and neighbors should watch for any increased isolation of an elderly person, which can be a sign of trouble.

This advice works the same in your community as it does in Los Angeles. If you have any concerns about the care of an elderly friend or loved one, speak with a California elder law attorney at Redkey Gordon P.C.. Robert A. Gordon can advise on the steps to take and work with you to make sure that your senior's interests are represented and they receive the care they need.

Reference: Los Angeles Daily News (October 15, 2014) "L.A. gets $1.6 million to combat elder abuse"

Get the 411 on Wills

"If you make a will you can distribute the wealth as per your wish and avoid many hassles. It particularly becomes more complicated if there are immovable properties involved and there are disputes on the values of such properties," says Ashish Kehair, EVP and head - private wealth and international businesses, ICICI Securities.

Why do you need a will?

One of the big reasons to make a will is to distribute the wealth as you want and avoid many of the headaches and expenses for your heirs, especially when you have immovable properties and disputes over their value. This caution is discussing in a recent article in The Business Standard titled "Why you should make a will." If there is no will and more than one legal heir, the distribution of assets is conducted by the court under probate law. This can be time-consuming and cumbersome.

Does the will need to be in a specific format? 

Generally it doesn't, but it must be properly signed and attested for it to be effective.

A will can be written in any language, but the words should be clear and unambiguous so that there's no question about the testator's intentions. The assets in the will should be detailed, as well as the recipient. The person executing the will should sign it, and it should be witnessed by two who saw the testator sign the will. The Business Standard reminds us to avoid a conflict of interest and not have a beneficiary or heir attest a will as a witness. Your estate planning attorney can help you with this.

Does a will need to be registered?

The registration of a will isn't required, but this does provide evidence that the proper steps have been taken.

What about an executor?

The testator appoints an executor to administer the will. It can be anyone he or she is comfortable with and trusts. It can be a family member, friend, attorney, or another individual. The executor is tasked with carrying out the instructions in the will for the distribution of the property and other assets.

For more answers to questions like these, take a look at the original article and speak to a Northern California experienced estate planning attorney at Redkey Gordon P.C..

Reference: The Business Standard (October 19, 2014)  "Why you should make a will"

Reverse Mortgage Schmortgage ... Try These Equity Options Instead

Home equity loans can be problematic if not done correctly and require careful attention to the rights of the surviving spouse, if you are married. And of course, the end of the process means you or your heirs give up your home. There are other ways to tap into your home’s equity that are worth considering. Here, we take a quick look at the top alternatives to reverse mortgages.

Is a reverse mortgage really the answer to your cash-flow needs? It all depends on your situation and the options at hand.

A recent Investopediaarticle, titled "5 Top Alternatives To A Reverse Mortgage," examines some of the top alternatives to reverse mortgages.

1. Refinance Your Existing Mortgage. If you have an existing home loan, you may be able to refinance your mortgage at a lower interest rate and lower your monthly payments to free up some cash.

2. A Home-Equity Loan. This is basically a second mortgage which allows you to borrow money against the equity in your home. The interest is typically tax deductible for loans up to $100,000.

3. A Home Equity Line of Credit. A home equity line of credit ("HELOC") lets you borrow up to an approved credit limit on an as-needed basis, and you pay interest only on the amount of money you actually withdraw. These are adjustable loans, so your monthly payment changes with the interest rates. Interest on a HELOC is usually tax deductible for loans up to $100,000.

4. Sell Your Home and Downsize. The original article also suggests that you think about selling your home to give you access to your home equity. This can be a great option if your current home is too big for your current needs or too difficult or costly to maintain.

5. Sell Your Home to Your Children. One way to do this is a sales-leaseback agreement, where you sell the house to your kids, then rent it back using the cash from the sale. Your children get rental income and will be able to take deductions for depreciation, real estate taxes and maintenance.

The original article says that reverse mortgages may be good for those who are “house-rich and cash-poor.” That is, people with home equity but too little retirement income. Before you decide on which option (if any) is right for you, you should definitely speak with Robert A. Gordon, an experienced estate planning attorney.

Reference: Investopedia (October 17, 2014) "5 Top Alternatives To A Reverse Mortgage"

True Story - What Can Happen If You Don't Sign Your Will!

The legal dispute surrounding the roughly $200 million estate of the late Charlotte developer Henry Faison has been resolved, with his company winning forgiveness of more than $100 million in loans he’d extended to it.

In this recent court case filed by Faison's sons, Jay and Lane, they asked the court to force Henry's company to allow the assets, including $105 million in loans extended by Faison, to pass to his foundation. The dispute centers on Henry's June 2000 will, which left the residuary of his estate to Faison Enterprises. 

However, Henry changed his mind in summer 2012.

As The Charlotte Observerdetailed in a recent article titled "Settlement reached in lawsuit over late developer Henry Faison’s estate," Henry decided to leave most of his personal wealth to a charitable trust he planned to name after his dog, Skeebo. This change would avoid about $110 million in federal estate taxes and allow the foundation to support conservative causes, according to court papers. But Henry passed away right before he could sign the will or the documents creating the trust.

In North Carolina, a written will isn’t valid unless it is handwritten by the decedent or is signed by that person and witnessed by two uninterested individuals.

Faison Enterprises argues that the sons are proposing a type of “post-mortem tax and estate planning” prohibited by state law. The company’s lawyers said Henry repeatedly declined to sign a 2012 draft will—even though he had it for more than two months before he died. They said his 2000 will should be followed.

The original article reported that the parties came to a settlement and that agreement was incorporated into an order from the Superior Court. The judge directed that the loans be distributed to Faison Enterprises, which means the company won’t have to repay them. He also required Jay and Lane Faison, co-executors of their father’s estate, to refund $1 million in interest the company paid on the loans and pay the company’s legal fees up to $2.5 million. The judge’s order also permitted Faison Enterprises the option to purchase certain properties owned by the estate.

After all legal fees, distributions and other expenses are satisfied, the remainder of the estate goes to the Skeebo trust.

This is a pretty straightforward situation that went sideways real fast because the decedent failed to make his intention known by signing a valid will and have his estate planning documents, such as a trust here, in order. You can avoid this type of prolonged and heated litigation by speaking with an experienced Sacramento estate planning attorney at Redkey Gordon P.C.. Get your business succession plan set and your personal asset distribution strategy defined to prevent your heirs and business associates from fighting in court after you're gone.

Reference: The Charlotte Observer (October 17, 2014) "Settlement reached in lawsuit over late developer Henry Faison’s estate"